Ghana’s debt stock has increased from $28.9 billion (GH¢142 billion) in 2017 to $34.6 billion (GH¢170.8 billion) in 2018.
The latest figure, according to Ghana’s Finance Minister Ken Ofori Atta represents 70 percent of the Country’s Gross Domestic Product (GDP).
Ofori Atta made this known on Thursday during his presentation of the government’s 2019 budget statement and economic policy in Parliament in Accra.
The $34.6 billion figure includes both external and domestic debts of $17.5 billion (GH¢86.6 billion) and $17.1 billion (GH¢84.1 billion) respectively.
The overall rate of debt accumulation in 2018 is 19.8 percent. The minister said that was driven primarily by the cost of the clean-up of the financial sector.
“The rate of debt accumulation would have been 11.5 percent without the clean-up exercise,” said Ofori Atta.
The financial sector clean up
Seven of Ghana’s indigenous banks have collapsed since 2017 with the government through the Bank of Ghana (BoG) merging five out of the seven into a single bank under the name Consolidated Bank of Ghana.
The minister in his presentation said the collapse of the banks cost government an amount of $2 billion (GH¢9.9billion).
He said the government’s intervention which had saved deposits of some $2.2 billion (GH¢11billion) as well as 2,661 jobs was a bold measure.
He said that helped to restore the health and resilience of the banking sector and to clamp down on unlicensed deposit-taking financial houses.